Kering, the luxury group behind Gucci, has reported a significant 11 percent decline in sales for the second quarter, with Gucci alone witnessing a staggering 20 percent drop in its revenue. This downturn raises questions about the brand’s strategy under new leadership.

For over a year, CEO Jean-François Palus and creative director Sabato de Sarno have aimed to reinvigorate Gucci with a more heritage-focused theme. However, this shift does not appear to have resonated with luxury consumers, who have recently curtailed their spending after a period of extravagant purchases. As a result, brands like Saint Laurent, previously a stable revenue driver for Kering, also reported a 7 percent decline in sales. The other brands under Kering’s umbrella, including Balenciaga and Alexander McQueen, faced a combined revenue decrease of 6 percent.

Analysts point to several factors contributing to Gucci’s struggles—notably changing consumer behavior in a recovering economy. Many shoppers are now prioritizing practicality over luxury, leading to decreased demand for high-end fashion items. As the sector grapples with these challenges, Kering must consider more aggressive strategies to reclaim its market position and revitalise the allure of its flagship brand.

This situation necessitates close observation as Kering navigates its path forward in an intricate luxury landscape, where maintaining relevance is paramount.